Applied Health Economics and Health Policy

, Volume 12, Issue 6, pp 623–633 | Cite as

The Importance of Proximity to Death in Modelling Community Medication Expenditures for Older People: Evidence From New Zealand

  • Patrick V. MooreEmail author
  • Kathleen Bennett
  • Charles Normand
Original Research Article



Concerns about the long-term sustainability of health care expenditures (HCEs), particularly prescribing expenditures, has become an important policy issue in most developed countries. Previous studies suggest that proximity to death (PTD) has a significant effect on total HCEs, with its exclusion leading to an overestimation of likely growth. There are limited studies of pharmaceutical expenditures in which PTD is taken into account.


This study presents an empirical analysis of public medication expenditure on older individuals in New Zealand (NZ). The aim of the study was to examine the individual effects of age and PTD using individual-level data.


This study uses individual-level dispensing data from 2008/2009 covering the whole population of medication users aged 70 years or older and resident in NZ. A case–control methodology was used to examine individual cost and medication use for a 12-month period for decedents (cases) and survivors (controls). A random effects two-part model, with a Probit and generalized linear model (GLM) was used to explore the effect of age and PTD on expenditures.


The impact of PTD on prescription expenditure is not as dramatic as studies reporting on acute and/or long-term care. The 12-month decedent-to-survivor mean expenditure ratio was 1.95; 2.09 for males and 1.82 for females. The additional cost of dying in terms of prescription drugs decreases with age, with those who die at 90 years of age or older consuming fewer drugs on average and having a lower mean expenditure than those who died in their 70s and 80s. The following variables were found to have a decreasing effect on the mean monthly prescription expenditures: a reduction of 2.2 % for each additional year of age, 4.2 % being in the Maori ethnic group, and 7.8 % for Pacific Islanders. Increases in monthly expenditure were associated with being a decedent 32.1–62.6 % (depending on month), being of Asian origin 16.2 %, or being a male 12.6 %.


Given the variance reported between survivors and decedents, future projections should include PTD in their models to improve accuracy. Policies targeted at reducing expenditures should not focus on age but on ensuring appropriate and cost-effective prescribing, particularly towards the end of life.


Health Care Expenditure Monthly Expenditure Total Health Care Cost Total Health Care Expenditure Coarsen Exact Match 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



Data were provided by the Ministry of Health New Zealand. The initial database was set up using facilities provided by the Trinity Centre for High Performance Computing, which is funded through grants from the Science Foundation Ireland. Patrick V. Moore is funded by the Health Research Board in Ireland (HRB PhD Scholars Programme in Health Services Research) under grant no. PHD/2007/16.

Conflicts of interest

No conflicts to be declared.

Author contributions

Patrick V. Moore designed the study, conducted the data analysis and prepared the manuscript. Kathleen Bennett was involved in the study design and preparation of the manuscript. Charles Normand was involved in the study design and review of the manuscript. All authors performed a critical review of the manuscript content and approved its final version. Patrick V. Moore acts as guarantor of the overall content of this article.


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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  • Patrick V. Moore
    • 1
    Email author
  • Kathleen Bennett
    • 2
  • Charles Normand
    • 1
  1. 1.Centre for Health Policy and ManagementTrinity College DublinDublin 2Ireland
  2. 2.Trinity Centre for Health SciencesSt James’s HospitalDublin 8Ireland

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